Yes, unemployment compensation is reported on your tax return differently than, and separately from, W-2 wage income. While the tax rate is identical (that is, a dollar of wages faces the same income tax rate as does a dollar of unemployment benefits) they are not identical items. Therefore they must be entered into the TurboTax software differently.
For wages, you should receive a W-2 from your employer or employers.
For unemployment compensation benefits, you should probably receive a Form 1099-G from your state government. If you have not received one of these statements yet (1099-G) then you likely will shortly. Also, you can call your state unemployment insurance office and ask them to send you one, or to send a replacement.
In TurboTax, entering state unemployment from a 1099-G is pretty simple. Just follow these mechanical instructions:
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Open your tax return in TurboTax online.
(To do this, sign in to TurboTax, see your Tax Timeline, and click, ‘Take me to my return.’)
- Using the Search feature in the upper right corner of the screen, enter 'unemployment compensation' and perform the search. Then click on the “Jump to” link, which is the first item in the search results.
- On the Unemployment (and Paid Family Leave) screen, answer Yes and click Continue.
- Follow the onscreen instructions to enter your 1099-G information.
However, if you don't think that you'll be getting a 1099-G from your state government, because your unemployment compensation was paid through another source, such as a private union, then please refer to the following webpage for further details, and instructions:
https://ttlc.intuit.com/questions/3277188-how-do-i-report-unemployment-if-i-didn-t-get-a-1099-g
Thanks for asking this important question.
